The forge produces iron (x ) with the cost function C„(x) = 31x², while it can sell the iron at the competitive price $19. The farmer produces apples (y) with the cost function C,(x, y) = 4y² + 2xy, while it can sell the apples at the competitive price $14. If the government wants to tax the forge to incentivize it to produce the socially optimal amount, how much should the government tax the forge per unit of iron produced? Round your answer to 2 decimal points. Answer:

The forge produces iron (x ) with the cost function C„(x) = 31x², while it can sell the iron at the competitive price $19. The farmer produces apples (y) with the cost function C,(x, y) = 4y² + 2xy, while it can sell the apples at the competitive price $14. If the government wants to tax the forge to incentivize it to produce the socially optimal amount, how much should the government tax the forge per unit of iron produced? Round your answer to 2 decimal points. Answer:

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter14: Environmental Economics

Section: Chapter Questions

Problem 11SQ

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